Business Segments

12 Months Ended

Dec. 31, 2014

Segment Reporting [Abstract]

Business Segments

Business Segments

We have two reportable segments: conventional real estate operations and affordable real estate operations. Our conventional real estate operations consist of market-rate apartment communities with rents paid by the residents and included 144 apartment communities with 43,393 apartment homes at December 31, 2014. Our affordable real estate operations consisted of 59 apartment communities with 8,943 apartment homes at December 31, 2014, with rents that are generally paid, in whole or part, by a government agency.

Due to the diversity of our economic ownership interests in our apartment communities, our chief executive officer, who is our chief operating decision maker, uses proportionate property net operating income to assess the operating performance of our apartment communities. Proportionate property net operating income reflects our share of rental and other property revenues less direct property operating expenses, including real estate taxes, for the consolidated and unconsolidated apartment communities that we manage.

The following tables present the revenues, net operating income (loss) and income (loss) from continuing operations of our conventional and affordable real estate operations segments on a proportionate basis (excluding amounts related to apartment communities sold or classified as held for sale) for the years ended December 31, 2014, 2013 and 2012 (in thousands):

	Conventional Real Estate Operations		Affordable Real Estate Operations		Proportionate Adjustments (1)		Corporate and Amounts Not Allocated to Segments (2)			Consolidated
Year Ended December 31, 2014:
Rental and other property revenues (3)	$	767,419	$	94,520	$	32,304	$	58,588		$	952,831
Tax credit and asset management revenues	—		—		—		31,532			31,532
Total revenues	767,419		94,520		32,304		90,120			984,363
Property operating expenses (3)	260,451		38,425		10,283		64,157			373,316
Investment management expenses	—		—		—		7,310			7,310
Depreciation and amortization (3)	—		—		—		282,608			282,608
Provision for real estate impairment losses (3)	—		—		—		1,820			1,820
General and administrative expenses	—		—		—		44,195			44,195
Other expenses, net	—		—		—		12,764			12,764
Total operating expenses	260,451		38,425		10,283		412,854			722,013
Operating income (loss)	506,968		56,095		22,021		(322,734		)	262,350
Other items included in continuing operations	—		—		—		(194,875		)	(194,875		)
Income (loss) from continuing operations	$	506,968	$	56,095	$	22,021	$	(517,609	)	$	67,475

	Conventional Real Estate Operations		Affordable Real Estate Operations		Proportionate Adjustments (1)		Corporate and Amounts Not Allocated to Segments (2)			Consolidated
Year Ended December 31, 2013:
Rental and other property revenues (3)	$	715,035	$	93,053	$	30,856	$	100,287		$	939,231
Tax credit and asset management revenues	—		—		—		34,822			34,822
Total revenues	715,035		93,053		30,856		135,109			974,053
Property operating expenses (3)	247,737		37,448		10,623		79,864			375,672
Investment management expenses	—		—		—		4,341			4,341
Depreciation and amortization (3)	—		—		—		291,910			291,910
General and administrative expenses	—		—		—		45,708			45,708
Other expenses, net	—		—		—		7,403			7,403
Total operating expenses	247,737		37,448		10,623		429,226			725,034
Operating income (loss)	467,298		55,605		20,233		(294,117		)	249,019
Other items included in continuing operations	—		—		—		(214,423		)	(214,423		)
Income (loss) from continuing operations	$	467,298	$	55,605	$	20,233	$	(508,540	)	$	34,596

	Conventional Real Estate Operations		Affordable Real Estate Operations		Proportionate Adjustments (1)		Corporate and Amounts Not Allocated to Segments (2)			Consolidated
Year Ended December 31, 2012:
Rental and other property revenues (3)	$	675,929	$	91,628	$	59,561	$	89,624		$	916,742
Tax credit and asset management revenues	—		—		—		41,769			41,769
Total revenues	675,929		91,628		59,561		131,393			958,511
Property operating expenses (3)	237,340		36,565		24,404		76,038			374,347
Investment management expenses	—		—		—		12,008			12,008
Depreciation and amortization (3)	—		—		—		325,173			325,173
Provision for real estate impairment losses (3)	—		—		—		6,235			6,235
General and administrative expenses	—		—		—		49,602			49,602
Other expenses, net	—		—		—		12,130			12,130
Total operating expenses	237,340		36,565		24,404		481,186			779,495
Operating income (loss)	438,589		55,063		35,157		(349,793		)	179,016
Other items included in continuing operations	—		—		—		(197,772		)	(197,772		)
Income (loss) from continuing operations	$	438,589	$	55,063	$	35,157	$	(547,565	)	$	(18,756	)

(1) Represents adjustments for the noncontrolling interests in consolidated real estate partnerships’ share of the results of our consolidated apartment communities and the results of consolidated apartment communities that we do not manage, which are excluded from our measurement of segment performance but included in the related consolidated amounts, and our share of the results of operations of our unconsolidated real estate partnerships that we manage, which are included in our measurement of segment performance but excluded from the related consolidated amounts.

(2) Our basis for assessing segment performance excludes the results of apartment communities sold or classified as held for sale. As discussed in Note 12, effective January 1, 2014, we adopted ASU 2014-08, which revised the definition of a discontinued operation. In the segment presentation above, the current year and prior years operating results for apartment communities sold or classified as held for sale during 2014 are presented within the Corporate and Amounts Not Allocated to Segments column. The operating results for the years ended December 31, 2013 and 2012, for apartment communities sold through December 31, 2013, are presented within discontinued operations and are accordingly excluded from the segment presentation above.

(3) Proportionate property net operating income, our key measurement of segment profit or loss excludes property management revenues (which are included in rental and other property revenues), property management expenses and casualty gains and losses (which are included in property operating expenses), depreciation and amortization and provision for real estate impairment losses. Accordingly, we do not allocate these amounts to our segments.

The assets of our reportable segments on a proportionate basis, together with the proportionate adjustments to reconcile these amounts to the consolidated assets of our segments, and the consolidated assets not allocated to our segments are as follows (in thousands):

	2014		2013
Conventional	$	5,116,474	$	4,815,063
Affordable	480,499		535,857
Proportionate adjustments (1)	65,139		253,019
Corporate and other assets	434,916		475,474
Total consolidated assets	$	6,097,028	$	6,079,413

(1) Represents adjustments for the noncontrolling interests in consolidated real estate partnerships’ share of the assets of our consolidated apartment communities, which are excluded from our measurement of segment financial condition, and our share of the assets of our unconsolidated real estate partnerships, which are included in our measure of segment financial condition.

For the years ended December 31, 2014, 2013 and 2012, capital additions related to our conventional segment totaled $355.4 million, $365.3 million and $252.3 million, respectively, and capital additions related to our affordable segment totaled $12.1 million, $10.7 million and $19.8 million, respectively.